Pennsylvania's Commonwealth Court has ruled that a decision by the Division of School Facilities in the Department of Education approving a school district's construction program will not be reviewed by the Court where the rejection by the Division of prior citizens' group complaints was not appealed to the Secretary of Education. The significance of the decision lies in the Commonwealth Court's determination that a PlanCon citizens' group complaint, once made, must be pursued in an administrative appeal or be forfeited.
Commonwealth Court Decision
In Citizens Concerned About Taxes v. Department of Educ., 739 A.2d 1129, WL 970265 (Pa. Cmwlth. 1999)(hereinafter referred to as "Citizens"), a three-judge panel of the Commonwealth Court considered an action brought by two citizens' groups, opposed to the construction of a new high school by a school district and other decisions related to the district's construction program.
The citizens' groups had previously filed an action in the county court of common pleas. In July 1998, the action there was dismissed by the county court on jurisdiction grounds, with the explicit suggestion that the matters complained of by the citizens' groups be presented to the Department of Education. Following the dismissal of the common pleas case and in July and September 1998, the citizens' groups submitted letters challenging the school district's construction program before the Department of Education's Division of School Facilities. The challenges to the district's construction program were answered or otherwise rejected in letters issued by the Division Chief. The citizens' groups took no immediate action in response, and in particular did not appeal to the Secretary of Education within an allowed 10-day period of time.
During the period of the Division's consideration of the citizens' complaints, the district continued with its construction program, and in particular sought approvals under the Department's PlanCon process, divided into lettered segments commonly referred to as PlanCon A through PlanCon J. On May 3, 1999, the Division approved PlanCon F, which constituted the Department's authorization to the district "to award bids and to enter into contracts . . . ." Citizens, 739 A.2d at 1129.
On May 13, 1999, ten days after the approval of PlanCon F, the citizens' groups filed the Citizens action in the Commonwealth Court, challenging the district's construction program. The grounds asserted in the action in Commonwealth Court were the same grounds as had been asserted, many months earlier, in the complaints made to the Division.
In considering the petition of the citizens' groups, the Commonwealth Court concluded that, although it possessed jurisdiction to hear the challenge to the PlanCon F approval by the Division, the action would be dismissed because of the failure of the citizens' groups to pursue the directly related complaints made to the Department and its Division in July and September of 1998 - - many months earlier. The citizens' groups, the Commonwealth Court concluded, had not requested that the Secretary review the decision of the Division to reject the objections within 10 days as required by rules of administrative procedure applicable to state agencies. See 1 Pa. Code § 35.20. Since the Division Chief is the subordinate of the Secretary, all of the former's decisions are reviewable by the latter. The failure to pursue the contentions asserted before the Division on appeal to the Secretary constituted a waiver of the objections to the district's construction program. See, Citizens, 739 A.2d at 1134.
Background of PlanCon Processes and Prior Court Decisions
The School Code requires that all public school construction projects must be approved by the state Department of Education. The Department has developed a comprehensive review and approval process which it calls "PlanCon" (Planning and Construction Workbook). The process requires school districts to submit separate applications for each stage of the PlanCon process, including acquisitions, engineering, bidding, contract awards, construction, etc. The process is divided into lettered segments commonly referred to as PlanCon A through PlanCon J. By way of illustration, Departmental approval of PlanCon A is required before the school district may proceed to PlanCon B, and so on. In order to obtain state reimbursement for its construction costs, the district must submit applications for every stage of the program through PlanCon J (Project Accounting Based on Final Costs). In particular, the approval at issue in Citizens, PlanCon F approval, is the step that allows the school district to proceed with the award of construction contracts.
In a series of prior decisions between 1975 and 1995, and prior to its decision in Citizens, Commonwealth Court had determined that persons opposed to school construction projects must exhaust the Department's administrative review process and cannot use their local county courts as a forum in an effort to obtain an injunction. Flaherty et al. v. Sch. Dirs. of Eastern Sch. Dist., 334 A.2d 310 (1975); Borough of Brentwood v. Brentwood Sch. Dist., 662 A.2d 675 (1995). In Flaherty, the Court also seemed to indicate that no appeal could be taken from the Department to the Commonwealth Court until "the Department concludes its deliberations on final approval, and not before." Flaherty, 334 A.2d at 312. However, the Court has never said explicitly when decisions in the PlanCon process are final and appealable. Indeed, the PlanCon process includes a final step, PlanCon J, that is not commenced until after the construction project has been completed.
In 1995, the Court ruled that the Chief of the School Facilities Division may not revise the final reimbursement rate applicable to a school construction project once the rate has become final by failure of any party to appeal to the Secretary. Ferndale Area Sch. Dist. v. Department of Educ., 668 A.2d 287 (1995). In Ferndale, the Court interpreted an administrative provision in the General Rules of Administrative Practice and Procedure that provides for appeals to an agency head from decisions of "subordinate officers." 1 Pa. Code § 35.20. The Court held that the Division Chief lost the ability to revise his own order setting Ferndale's reimbursement rate when he failed to appeal within 10 days to the Secretary.
Significance of the Citizens Decision
The case law in Flaherty, Brentwood and Ferndale make it clear that a disgruntled local citizens' group could not circumvent the administrative processes of the Department and its Division, once those processes are invoked, by filing actions directly with the Commonwealth Court. What was not clear, however, was whether any of the separate intermediate PlanCon decisions or other decisions of the Division made in response to citizens' complaints, can or must be appealed to the Secretary within the time constraints of Rule 35.20. That issue was resolved in the Citizens case, at least with regard to citizens' complaints actually presented to the Division. Given that the citizens' groups there had pressed complaints and allegations in July and September of 1998, without appealing the Division's rejection of those complaints to the Secretary, the complaints were waived. Citizens, 739 A.2d at 1134.
It may also be that each separate decision in PlanCon to approve a separate PlanCon submittal by a school district is also binding. The Commonwealth Court in Citizens did conclude that PlanCon F was a final decision. Citizens, 739 A.2d at 1133. What Citizens does not decide however, is whether the earlier PlanCon decisions (PlanCon A through PlanCon E), none of which were appealed, were binding on the citizens' groups. Although involved in administrative communications with the Division throughout the period of PlanCon review, the citizens' groups were not formal parties to the PlanCon process. Thus, it remains to be seen whether the Citizens analysis applies to any of the PlanCon steps that precede, or for that matter, follow PlanCon F. Is a local resident or taxpayer forever foreclosed from challenging the location for a proposed new high school if he fails to ask the Secretary to review the Division's PlanCon C approval of the site within 10 days? Or, is site approval merely a necessary step along the path to PlanCon F such that a taxpayer can question the location and the bid plan and every step from A to E in his appeal of PlanCon F approval? Future cases are also likely to question whether a taxpayer who missed the deadline for PlanCon F appeal may raise the same issues in a subsequent appeal of PlanCon G through J.
For their part, school districts will certainly be tempted to argue that any individual or group dissatisfied with any PlanCon decision of the Division Chief was required to file an appeal to the Secretary of Education and has waived the right to challenge the decision by the failure to do so. If an appeal has been filed, the individual or group will have preserved their right to continue with a challenge by processing a subsequent appeal from any adverse decision by the Secretary to the Commonwealth Court. Failing a full administrative exhaustion of challenges to a school district construction program, and on the basis of the Commonwealth Court's decision in Citizens, school districts in Pennsylvania will be able to argue that citizens' complaints and challenges have been waived.